A Southern California man was sentenced to prison for defrauding the government of over $6.9 million through a scheme that targeted small business loans during the COVID-19 pandemic.
The man was identified as Abraham Park, 67, of La Mirada, according to the U.S. Attorney’s Office.
His scheme defrauded the Small Business Administration (SBA) out of millions of dollars in loans through the Economic Injury Disaster Loan (EIDL) Program.
According to court documents, the crimes occurred from March 2020 through October 2022. Park was the owner of a financial services company that helped clients repair credit scores and obtain financing, including loans.
When the pandemic began, Park told his clients to create fake corporate entities so that he could submit fraudulent EIDL loan applications to the SBA on their behalf.
In return, his clients would pay him a portion of the loans received as a kickback, prosecutors said. Park also submitted false applications for himself and his family members.
In total, he submitted over 120 fraudulent applications through this method. Only 73 loans were funded, which resulted in a nearly $7 million loss to the SBA.
On March 20, Park pleaded guilty to one count of wire fraud and one count of money laundering. On Aug. 7, he was sentenced to 3 years and 10 months in prison and ordered to pay $6,993,700 in restitution and $535,041 in forfeiture.
“Since the inception of the CARES Act, the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds,” federal officials said.
More information, including ways to report fraud cases, can be found here.